Arbitrage Calculator
Check whether a YES/NO price gap between prediction market platforms still pays after fees
NO price = 100 - 56 = 44c
Buy YES on Polymarket at 52c and NO on Kalshi at 44c. If both platforms resolve the event the same way, one of the two contracts pays $1.00 per contract set. Your total cost is $0.9600 per set (including fees), which leaves $0.0400 profit (4.17%) per set at resolution. With a $1,000 investment you buy 1041.7 contract sets, for a profit of $41.67 at resolution if both orders fill at these prices.
Total Cost = YES_A + NO_B + (YES_A x Fee_A%) + (NO_B x Fee_B%)
Arbitrage = Total Cost < $1.00
Profit/Set = $1.00 - Total Cost
Contracts = Investment / Total Cost
Profit % = (Payout - Investment) / Investment x 100
What is Arbitrage?
Arbitrage means exploiting a price difference for the same thing in two markets. In traditional finance, a trader buys an asset on one exchange and sells it on another at the same moment, capturing the difference without betting on where the price goes next. In prediction markets, the closest equivalent is buying YES on one platform and NO on the same event on another when the two prices add up to less than the $1.00 a winning contract pays. Profiting either way depends on both platforms resolving the event the same way, so this carries risks that classic arbitrage does not.
How Prediction Market Arbitrage Works
Prediction markets like Polymarket and Kalshi sell contracts that pay $1.00 if an event happens (YES) or does not happen (NO). On a single platform, the prices to buy YES and NO usually add up to $1.00 or a little more, because of the bid-ask spread. When the same event is listed on several platforms, their prices can drift apart. If you can buy YES on Platform A and NO on Platform B for less than $1.00 combined, you have found a price gap. If both platforms resolve the event the same way, one of your two contracts pays $1.00, so your profit is $1.00 minus your total cost including fees. If they resolve it differently, both contracts can lose.
Understanding Platform Fees
Fees decide whether a price gap is worth trading, because every cent of fees comes out of the gap. Kalshi's trading fees depend on the contract price and are highest around 50 cents. Polymarket charges taker fees on many markets, at rates that vary by market category, and both platforms change their fee schedules from time to time. Deposits, withdrawals, card payments and on-chain transfers can add further costs. A 4-cent gap can all but disappear once both legs pay fees. The calculator applies each fee as a percentage of that leg's price, and both fee fields start at 0%, so enter the current fees for the market you are trading. For a fee of rate × P × (1 − P) per contract, enter rate × (1 − P) × 100, where P is this leg's price in dollars. For example, rate 0.07 at P = 0.50 means 3.5%, not 7%. Exchange rounding and other costs can change the result.
Risks of Prediction Market Arbitrage
A price gap below $1.00 is not a sure profit. These risks can shrink it or turn it into a loss. Settlement risk: Different platforms may interpret the same event differently, leading to scenarios where both your YES and NO contracts lose. Execution risk: Prices can move between when you spot the opportunity and when you execute both legs of the trade, especially in fast-moving markets. Liquidity risk: You may not be able to fill your desired size at the quoted price, resulting in slippage. Platform risk: One platform could freeze withdrawals, change rules, or become insolvent before settlement. Capital lockup: Your funds are locked until the event resolves, which could be days, weeks, or months, reducing your annualized return.
Why Arbitrage Opportunities Exist
Prediction market arbitrage opportunities arise due to market inefficiency. Different platforms attract different user bases with varying opinions and information. Polymarket is popular with crypto-native traders, while Kalshi appeals to a more traditional finance audience. These different participant pools can lead to genuine price discrepancies on the same events. Not every gap is a mispricing, though: two markets that look alike can differ in wording, deadline or resolution source, and the price difference may reflect exactly that. Additionally, capital barriers (moving funds between platforms takes time), regional access restrictions, and differences in fee structures all contribute to price dislocations that create arbitrage windows. These opportunities tend to be fleeting, as sophisticated market makers and automated bots actively monitor for and exploit them, pushing prices back toward equilibrium.
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Results depend on your inputs and the assumptions shown by this calculator. Reference links explain the model; they do not supply a live price feed. Fees, execution and changing market conditions can affect actual outcomes.
Frequently asked questions
What is prediction market arbitrage?
Prediction market arbitrage means buying YES on one platform and NO on the same event on another when the two prices add up to less than the $1.00 a winning contract pays. Buying YES at $0.45 and NO at $0.50 costs $0.95, a gap of $0.05 per pair before fees. You only collect it if both orders fill at those prices and both platforms resolve the event the same way.
Is prediction market arbitrage risk-free?
No. The gap is only locked in if both orders fill at the quoted prices, you hold both contracts until resolution and both platforms resolve the event the same way. Polymarket and Kalshi set their own rules and resolution sources, so the same question can resolve differently and both legs can lose. Fees, slippage, prices moving before the second order fills, deposit and withdrawal costs, capital tied up until resolution, and platform or access restrictions can shrink the gap or turn it into a loss.